Irish Potatoes Grown in Southeastern States; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 953

[Docket No. FV98-953-1 FIR]

Irish Potatoes Grown in Southeastern States; Increased Assessment

Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a

final rule, without change, the provisions of an interim final rule

which increased the assessment rate established for the Southeastern

Potato Committee (Committee) under Marketing Order No. 953 for the

1998-99 and subsequent fiscal periods from $0.0075 to $0.01 per

hundredweight of potatoes handled. The Committee is responsible for

local administration of the marketing order which regulates the

handling of Irish potatoes grown in two southeastern States (Virginia

and North Carolina). Authorization to assess potato handlers enables

the Committee to incur expenses that are reasonable and necessary to

administer the program. The fiscal period begins June 1 and ends May

31. The assessment rate will remain in effect indefinitely unless

modified, suspended, or terminated.

EFFECTIVE DATE: October 2, 1998.

FOR FURTHER INFORMATION CONTACT: Jim Wendland, DC Marketing Field

Office, Marketing Order Administration Branch, Fruit and Vegetable

Programs, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-

6456; telephone: 202-720-2491, Fax: 202-205-6632; or George Kelhart,

Technical Advisor, Marketing Order Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, Washington,

DC 20090-6456; telephone: 202-720-2491, Fax: 202-205-6632. Small

businesses may request information on compliance with this regulation

by contacting Jay Guerber, also at the above address, telephone, and

Fax.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement No. 104 and Order No. 953, both as amended (7 CFR part 953),

regulating the handling of Irish potatoes grown in two southeastern

States (Virginia and North Carolina), hereinafter referred to as the

``order.'' The order is effective under the Agricultural Marketing

Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter

referred to as the ``Act.''

The Department is issuing this rule in conformance with Executive

Order 12866.

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. Under the marketing order now in effect, Virginia-North

Carolina potato handlers are subject to assessments. Funds to

administer the order are derived from such assessments. It is intended

that the assessment rate as issued herein will be applicable to all

assessable potatoes beginning June 1, 1998, and continuing until

amended, suspended, or terminated. This rule will not preempt any State

or local laws, regulations, or policies, unless they present an

irreconcilable conflict with this rule.

The Act provides that administrative proceedings must be exhausted

before parties may file suit in court. Under section 608c(15)(A) of the

Act, any handler subject to an order may file with the Secretary a

petition stating that the order, any provision of the order, or any

obligation imposed in connection with the order is not in accordance

with law and request a modification of the order or to be exempted

therefrom. Such handler is afforded the opportunity for a hearing on

the petition. After the hearing the Secretary would rule on the

petition. The Act provides that the district court of the United States

in any district in which the handler is an inhabitant, or has his or

her principal place of business, has jurisdiction to review the

Secretary's ruling on the petition, provided an action is filed not

later than 20 days after the date of the entry of the ruling.

This rule continues to increase the assessment rate established for

the Committee for the 1998-99 and subsequent fiscal periods from

$0.0075 to $0.01 per hundredweight of potatoes handled.

The Southeastern Potato Marketing Order provides authority for the

Committee, with the approval of the Department, to formulate an annual

budget of expenses and collect assessments from handlers to administer

the program. The members of the Committee are producers and handlers of

Southeastern potatoes. They are familiar with the Committee's needs and

with the costs for goods and services in their local area and are thus

in a position to formulate an appropriate budget and assessment rate.

The

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assessment rate is formulated and discussed in a public meeting. Thus,

all directly affected persons have an opportunity to participate and

provide input.

For the 1996-97 and subsequent fiscal periods the Committee

recommended, and the Department approved, an assessment rate of $0.0075

per hundredweight of potatoes handled that would continue in effect

from fiscal period to fiscal period unless modified, suspended, or

terminated by the Secretary upon recommendation and information

submitted by the Committee or other information available to the

Secretary.

The Committee met on April 16, 1998, and unanimously recommended

1998-99 expenditures of $12,000, the same as last year. The major

expenditures include $7,700 for the manager's and secretarial salaries

and $1,000 for travel expenses. These and all other expense items are

budgeted at last year's amounts.

Regarding the assessment rate, after considering several options,

the Committee concluded that the former rate of $0.0075 per

hundredweight would not be adequate for the 1998-99 fiscal period for

the following reasons. The Committee's operating reserve was only

$5,000 and was expected to be quickly exhausted. The reserve was the

lowest ever for any of the Committee's fiscal periods except one. Also,

wet fields caused delayed plantings and unfavorable growing conditions,

resulting in potato plant stands estimated to be 20 percent below

normal. As a result of this and other factors, the Committee projected

that during the industry's brief, predominately June and July, shipping

and assessing period, its total potato volume to be handled would be

down at least 100,000 hundredweight. Therefore, the Committee

unanimously recommended an assessment rate of $0.01 per hundredweight,

$0.0025 higher than the rate formerly in effect.

The assessment rate recommended by the Committee was based on

projected fresh market shipments of 1,200,000 hundredweight (cwt) of

Southeastern potatoes, which should provide $12,000 in assessment

income. However, recent information indicates that these shipments will

only be approximately 900,000 cwt, providing about $9,000 in

assessments. But this income, along with funds from the Committee's

authorized operating reserve, will be adequate to cover budgeted

expenses. Funds in the reserve at the beginning of the 1997-98 fiscal

period were estimated at only $5,000. Funds in the reserve are now

expected to be about $2,000, well within the maximum permitted by the

order of approximately one fiscal period's expenses (Sec. 953.35).

The assessment rate will continue in effect indefinitely unless

modified, suspended, or terminated by the Secretary upon recommendation

and information submitted by the Committee or other available

information.

Although this assessment rate is effective for an indefinite

period, the Committee will continue to meet prior to or during each

fiscal period to recommend a budget of expenses and consider

recommendations for modification of the assessment rate. The dates and

times of Committee meetings are available from the Committee or the

Department. Committee meetings are open to the public and interested

persons may express their views at these meetings. The Department will

evaluate Committee recommendations and other available information to

determine whether modification of the assessment rate is needed.

Further rulemaking will be undertaken as necessary. The Committee's

1998-99 budget and those for subsequent fiscal periods will be reviewed

and, as appropriate, approved by the Department.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Agricultural Marketing Service (AMS) has considered the

economic impact of this rule on small entities. Accordingly, AMS has

prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of

business subject to such actions in order that small businesses will

not be unduly or disproportionately burdened. Marketing orders issued

pursuant to the Act, and the rules issued thereunder, are unique in

that they are brought about through group action of essentially small

entities acting on their own behalf. Thus, both statutes have small

entity orientation and compatibility.

There are approximately 85 producers of Southeastern potatoes in

the production area and approximately 40 handlers subject to regulation

under the marketing order. Small agricultural producers have been

defined by the Small Business Administration (13 CFR 121.601) as those

having annual receipts of less than $500,000, and small agricultural

service firms are defined as those whose annual receipts are less than

$5,000,000. The majority of Southeastern potato producers and handlers

may be classified as small entities.

This rule continues to increase the assessment rate established for

the Southeastern Potato Committee and collected from handlers for the

1998-99 and subsequent fiscal periods from $0.0075 per hundredweight to

$0.01 per hundredweight of potatoes handled. Both the $0.01 assessment

rate and the 1998-89 budget of $12,000 were unanimously recommended by

the Committee at its April 16, 1998, meeting. The assessment rate

continued in effect by this action is $0.0025 higher than the 1997-98

rate. The Committee recommended an increased assessment rate to help

offset the smaller projected crop of assessable Southeastern potatoes

in 1998. Recent information indicates these shipments will only be

approximately 900,000 hundredweight (cwt), about 400,000 cwt less than

the 1997 crop, to provide about $9,000 in assessments. But this income,

along with funds from the Committee's authorized operating reserve,

will be adequate to meet the 1998-99 fiscal period's budgeted expenses.

Funds in the reserve at the beginning of the 1997-98 fiscal period were

approximately $5,000. Funds in the reserve are now expected to be only

about $2,000, well within the maximum permitted by the order of

approximately one fiscal period's expenses (Sec. 953.35). The Committee

discussed leaving the assessment at the previous $0.0075 rate but

determined that the significantly smaller crop would not generate

enough income to meet budgeted expenses without exhausting the $5,000

operating reserve, and this was not acceptable.

The major expenditures recommended by the Committee for the 1998-99

fiscal period include $7,700 for the manager's and secretarial salaries

and $1,000 for travel expenses. These and all other expense items are

budgeted at last year's amounts.

A review of historical information and recent preliminary

information indicate that the grower price for the 1998-99 Southeastern

potato crop could average approximately $7.00 to $8.00 per

hundredweight. With fresh market shipments in 1998 of approximately

900,000 hundredweight, the estimated assessment revenue for the 1998-99

fiscal period ($9,000) as a percentage of the projected fresh market

crop value ($7,200,000) could be 0.005 percent.

While assessments impose some additional costs on handlers, the

costs are minimal and uniform on all handlers. Some of the additional

costs may be passed on to producers. However, these costs will be

offset by the benefits derived by the operation of the order. In

addition, the Committee's meeting was widely publicized throughout the

Southeastern potato industry and all interested persons were invited to

attend the meeting and

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participate in Committee deliberations on all issues. Like all

Committee meetings, the April 16, 1998, meeting was a public meeting

and all entities, both large and small, were able to express views on

this issue.

This action imposes no additional reporting or recordkeeping

requirements on either small or large Southeastern potato handlers. As

with all Federal marketing order programs, reports and forms are

periodically reviewed to reduce information requirements and

duplication by industry and public sector agencies.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this rule.

An interim final rule concerning this action was published in the

Federal Register on June 17, 1998, (63 FR 32966). Copies of that rule

were also mailed or sent via facsimile to all Southeastern potato

handlers. Finally, the interim final rule was made available through

the Internet by the Office of the Federal Register. A 30-day comment

period was provided for interested persons to respond to the interim

final rule. The comment period ended on July 17, 1998, and no comments

were received.

After consideration of all relevant material presented, including

the information and recommendation submitted by the Committee and other

available information, it is hereby found that this rule, as

hereinafter set forth, will tend to effectuate the declared policy of

the Act.

List of Subjects in 7 CFR Part 953

Marketing agreements, Potatoes, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 953 is

amended as follows:

PART 953--IRISH POTATOES GROWN IN SOUTHEASTERN STATES

Accordingly, the interim final rule amending 7 CFR part 953 which

was published at 63 FR 32966 on June 17, 1998, is adopted as a final

rule without change.

Dated: August 26, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit & Vegetable Programs.

[FR Doc. 98-23516 Filed 9-1-98; 8:45 am]

BILLING CODE 3410-02-P